« Previous | Main | Next »

More turns in wide turbine debate

Andrew Neil | 18:36 UK time, Monday, 14 March 2011

In my previous blog I investigated the claim by Transport Secretary Philip Hammond on Wednesday 1st March's Daily Politics that "onshore wind [turbines] doesn't need subsidy anymore, onshore wind can pay its way."

I wrote that:

"Onshore wind turbine generators don't necessarily get a direct subsidy to build or operate the turbines (though some might) but under the government's Renewables Obligation electricity companies must buy power generated by onshore turbines at twice the market rate.

"This 100% higher price is then passed on to the rest of us in higher electricity bills may conclude that is as much a subsidy as a straight taxpayers' grant."

I concluded that readers were likely to think that enjoying twice as much as the market price, mandated by law, is as much a subsidy as a straight taxpayers' grant.

But I invited the Transport Department and the Energy Department to comment and promised to publish whatever they sent us.

Well, we've heard nothing from Mr Hammond's department but this is what we've had from the Department for Energy and Climate Change:

“The current high oil price, and the increasingly clear evidence on climate change, underline the need to move away from fossil fuels.

"Onshore wind is one of the cheapest forms of low carbon energy and the UK has a massive natural resource to exploit.

"There is no direct public subsidy, but wind energy does benefit from the Renewables Obligation.”

The first sentence is irrelevant to Mr Hammond's claim.

The second would suggest that onshore wind is so cheap and so plentiful that there is no need to subsidise it.

The third sentence confirms that there is indeed a subsidy to onshore wind turbine operators via the legal obligation of electricity companies to buy electricity at artificially high rates (and then pass on the extra cost to us, the electricity consumers).

Note that the DECC does not deny that the Renewables Obligation is a subsidy by any other name.

And remember the context of Mr Hammond's remarks: he was seeking to differentiate between onshore wind (not subsidised, he said) and offshore (which he conceded was subsidised).

In fact they are both subsidised in the same way but to different degrees. Onshore wind gets to charge twice the market price, offshore three times (because it is much more expensive).

Incidentally, I was told by senior sources last week that the Treasury thought it "daft" to be adding to our energy bills in this way at a time of soaring energy prices and was biding its time to "open a second front" against the strong wind power lobby within and around the government.


or register to comment.

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.